In an era characterized by significant economic volatilities and workforce disruptions such as job insecurity, rising inflation and supply chain disruptions, many people face financial instability, making it difficult to meet basic needs such as housing, health care and education.

Moreover, businesses, especially small ones, struggle to stay afloat, leading to layoffs and reduced hours for employees. This economic turmoil has widespread psychological effects, contributing to increased anxiety, stress, depression and a general sense of instability.

As such, the need for more authenticity and empathy has undeniably become two of the hardest “soft skills” that leaders need to be effective.

The Need for Authentic Leadership

I define authenticity as being true to your best self and genuine in your actions and your words. Second, it is demonstrating the utmost degree of honesty, respect and openness in interactions, communications and decision-making. And third, it is having a great sense of self-awareness — knowing not only your strengths and your weaknesses but also living your values.

Authentic leaders don’t feel the need to put on a facade or act differently in various situations. This quality makes them relatable, trustworthy and able to form deeper connections with their teams. These traits are so critical because when you don’t demonstrate them, the opposite behaviors can wreak havoc on working relationships and on company culture.

Here’s an example of what not to do:

I worked with a leader who would say and do things that were harsh and insulting, such as berating people in meetings, calling her direct reports “dumb and stupid,” taking the credit for their ideas while blaming them when things went wrong, and telling women to “man up,” to name a few.  When she was given feedback about the impact of these actions, she would respond with “I tell it like it is and I keep it real. If they can’t handle it, well, they just need to grow thicker skin.”

She had it all wrong. This is not the kind of “realness” and “truth-telling” that workers want. This is not what authentic or empathetic leadership looks like.

Unfortunately, many leaders fall short of modeling authenticity and empathy because they have not historically been considered key leadership competencies and, thus, they did not receive training on how to demonstrate them. As a result, these leaders fail to effectively connect with workers and to understand what they may be going through — personally or professionally.

However, the good news is that more leaders have come to recognize the importance of effective human interaction given the state of our current climate, rising costs of living and the fear of an impending recession, not to mention the transitions of the past four years. And they are asking for the tools and strategies for doing it effectively.

All of these attributes reveal what research shows that top talent is seeking and expecting from their leaders. In fact, Harvard Business Review found that 75% of employees want to experience more authenticity at work.

Here are five examples of what leadership authenticity looks like:

• Remaining accessible and approachable — keeping an open door policy.
• Seeking out feedback from employees and making it easy for them to relay their ideas.
• Being honest in relaying information with staff — in emails, calls, texts or through internal messaging platforms — no matter how difficult the news.
• Owning up to mistakes when they are made and telling stories of your lessons learned.
• Admitting when you don’t know the answer to something rather than making it up. (This example is really important because it shows vulnerability.)

While these are workplace behaviors, they apply to our financial situations, relationships and other aspects of our lives as well. We all want honesty, openness and to be heard and understood.

Similarly, empathy means valuing the feelings, fears, perspectives and experiences of others; avoiding judgment; feeling “with” others when appropriate; conveying your understanding of another’s emotions; and responding to their needs in order to improve trust, engagement and performance.

Moreover, empathy isn’t just a feeling: It’s also an action. Feeling with or understanding how someone else might feel is an important first step, but entirely internal. If others don’t in turn feel that you understand them and are taking their emotions into account as you make decisions, all that internal work doesn’t add up to much.

Empathy is so important that it was deemed as one of the top leadership skills of 2023 by CEO World and Forbes. Additionally, a myriad of studies has established a compelling business case for why leaders should demonstrate empathy. They range from employee retention, increased productivity, strong trust, retention and decreased stress:

• According to the Businessolver 2023 State of Workplace Empathy report, 93% of employees are more likely to stay with an empathic employer.
• A survey referenced in Harvard Business Review found that over 80% of CEOs recognized empathy as key to success.
• A new study of 889 employees by Catalyst found that empathy has some significant constructive effects: When people reported their leaders were empathetic, they were more likely to report they were able to be innovative — 61% of employees compared to only 13% of employees with less empathetic leaders. In the same study, 76% of people who experienced empathy from their leaders reported they were engaged compared with only 32% who experienced less empathy.
• A global study by Qualtrics found 42% of people have experienced a decline in mental health. Specifically, 67% of people are experiencing increases in stress while 57% have increased anxiety, and 54% are emotionally exhausted. 53% of people are sad, 50% are irritable, 28% are having trouble concentrating, 20% are taking longer to finish tasks, 15% are having trouble thinking and 12% are challenged to juggle their responsibilities. Declining mental health has led to an increased need for empathy.

How to Build Empathy as a Leader

So, how do you become a more empathetic leader? What does it look like when done well?

There is no one right way to be an empathetic leader. Sometimes, it’s enough to simply listen actively to understand how the other person feels when they have shared a situation with you (good or bad), and to mirror back what you heard.

Other times, it’s appropriate and valuable to relay to them that you, too, have experienced similar challenges and can relate to how they are feeling. A skilled empathic leader makes the decision that best meets the moment but is always sincere in their response.

If leaders can’t express true emotional empathy, they shouldn’t fake it. Rather, they should be gracious enough to realize that different people will react to the same situation differently. The other person’s emotional reaction to their experience is real and valid for them.

Not being able to immediately relate should not prevent leaders from being supportive or kind.

Empathy and authenticity are essential at a time when we are facing unprecedented disruption in the workplace, job market and around the world. Both are necessary for effective relationship building and communication.

Additionally, they enable leaders to convey difficult messages with compassion and sincerity; demonstrate care and concern in a way that maintains self-esteem and dignity; and foster a supportive work environment where employees feel comfortable and safe to effectively navigate personal and professional challenges.